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Lumber Sales Cost 



Editor's Note 



The following interesting and instructive paper on Liiiubcr scales Cost from the niiinufaeturer's viewpoint. w;is 

 liclivered bv (' 1. Harrison, socrotiu-v and sales manaser of the nimmelliergcr-IIarrison Lumber Company, tlie red 

 sum specialist of Cape liirardeau. Mo., at the recent annual meitiui; of the Lumber Sales Managers' Associatuui 

 held in Chicago. It is a very interesting exposition of the suli.iei t from a manufacturers viewpoint, and contains 

 manv suggestions of high value to those engaged in the mmkcfing of lumber. 



We who manufacture lumber are, to a great 

 degree, isolated from the , markets which con- 

 sume our product. With the majority of us, 

 logging problems and tlu' nuiltitude of vexing 

 questions that surround the production of lum- 

 lier, completely overshadow the sales problem. 

 And how penny-wise and pound-foolish is such 

 a situation! How contrary to the spirit of a 

 business age where the salesman — the business 

 getter, the actual warrior on the battlefield of 

 business — is the most important factor in the 

 ivliole complicated structure! 



This condition naturally arises from the fact 

 that so many of the big operators of today are 

 graduates of the ' ' University of Hard Knocks ' ' 

 — practical men who have handled woods and 

 mill crews by means of pure physical strength 

 and sheer courage, and who think the same 

 tactics can enter into the selling policy. So it 

 is that tact gives way to force and instead of 

 ■using his best talents to exploit his goods, the 

 lumber manufacturer gives first thought to his 

 manufacturing organization. 



To lower producing costs a few cents per 

 tliousand, the average operator will spend hours 



of precious time looking into the merits of a new machine, or listen 

 iug patiently to the exploitation of a new cup grease or belt by some 

 eloquent and persuasive "knight of the grip,"' and then turn right 

 around and quote a ridiculous price on some well-selling standard 

 item of production without batting an eye-lash. 



In candid truth let is be known that most of us handle our cor- 

 respondence, develop our markets and select our customers with about 

 as much expenditure of judgment as we would exhibit in buying a 

 fcaby L'ish lace collar at a department store bargain sale. We treat 

 me sales department — the most vital feature of our business — as a 

 Side line. We half-heartedly keep in touch with the pulse of the 

 market and we let some clerk handle sales problems that the best 

 of us could well afford to sleep over and then weigh again and again 

 in the delicate balances of our most discriminative judgment. 



With this condition prevalent, let us see how to remedy it in slight 

 degree at least, and let us all take off our hats to the real lumber 

 merchant, the balance wheel of the lumber business and t)ie shrewd 

 judge and dictator of lumber values — the legitimate wholesale jobber. 

 It seems logical to predicate this analysis of a producer's sales cost 

 on the theory that at a manufacturing plant, the sales problem 

 begins when the lumber is completely manufactured and either put 

 on skids for immediate shipment or into piles for curing. From 

 such a beginning until the sale has been made and the account col- 

 lect-ed in full, the accruing costs of disposition are strictly sales 

 costs. 



Eight in the beginning, therefore, comes the problem of determin- 

 ing whether the product shall be sold green or dry. This involves 

 consideration of deterioration, shrinkage, insurance, interest, yarding, 

 «tc., also extra freight charges, offsetting to a degree the other sav- 

 ings. How many of us have this data in black and white, as the 

 result of carefully collected and compiled statistics, and if we do not 

 know, why should we not, through this organization, take steps at 

 once to know, thoroughly and definitely, just what the true facts are 

 concerning the marketing of any certain hardwood item in its green 

 state and in varying stages of merchantable dryness. 



The basis — the foundation rock of every successful business — is 

 "satisfied customers." Is it not illogical that the practical execu- 



C. L. HARRISON. CArE GIRARDEAU. MO 



five, therefore, should depend entirely upon his 

 salesman's reports, or his correspondence, to 

 bring about the closest possible relationship 

 witli his consmning trade? 



The .successful jobber specializes on personal 

 contact with his customer, and we producers, 

 who sell the wholesaler at a price that his 

 definite and specific knowledge enables him in 

 turn to advance to the consumer, must acknowl- 

 edge the effectiveness of his methods. Of 

 course, lack of time will be pleaded in answer 

 to this charge of neglecting to know at first 

 hand the specific problems, likes and dislikes, 

 of the consumer, but an executive's time is 

 worth what it saves in money, and an annual 

 visit to every consumer's plant, cost what it 

 may, will bring about such a clearer under- 

 standing of the consumer's needs, his personal 

 attitude and prejudices and his general point 

 of view, that the wheels of relationship thus 

 greased will turn infinitely smoother than 

 would be possible where no such perfect under- 

 standing existed. 



I know of one concern that, under this 

 method, adjusted all claims on a .$4.50,000 busi- 

 ness last year with a loss of less than one-third of one per cent, and 

 with absolutely no loss in prestige. This firm spends money to hold 

 its old time-tried trade, and by the injection of personality into its 

 sales methods has largely drawn itself out of the field of competition 

 as far as money values are concerned. Its trade is content to pay 

 top market prices in return for absolutely satisfactory and trustworthy 

 service. 



For the operator, especially one specializing on any certain wood, 

 advertising is a legitimate sales expense. Too many of us look upon 

 our advertising appropriation as a sort of charity fund, to be ex- 

 pended as the whims of fancy dictate. Let us right about face and 

 meet . the real situation. Marketing problems are made easier as 

 demand is fostered and built up. The manufacturers of the multitude 

 of substitutes recognize this fact and necessity is making the lumber- 

 man see it, too. Let us resolve to vigorously combat the encroach- 

 ment of substitutes and to treat our advertising as a real sales ex- 

 pense, a legitimate item in the cost of moving our lumber. We must, 

 individually and in concerted manner, tell the great consuming public 

 what we lumbermen have for it, and why our product is better than 

 the substitutes which "blare and glare" advertising methods have 

 forced into the limelight to dim and belittle the great staple of 

 human dependence which we make and which has, more than any one 

 other factor, served to civilize man and to make him comfortable 

 and contented. 



With conflagrations reducing so-called "fireproof" structures to 

 ghastly ruins, with railway claim departments paying out vast simis 

 for damages on paper-packed shipments and with all of the number- 

 less examples of failure exhibited by substitutes for wood, it will 

 not be a difficult task to convince the big fair-minded, thinking 

 public of the fallacy of substitutes for lumber. 



Our sales costs properly include insurance on the lumber in pile. 

 Here we have a problem that intelligent study by lumbermen has 

 already solved for us. Strong inter-insurance organizations, acting 

 through attorneys and directed by groups of shrewd, practical lum- 

 bermen, make it possible for the operator to carry insurance at actual 

 cost. The plan is beyond its experimental stage and no producer 

 can afford to carry high-priced "old line" insurance with this oppor- 



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